Macro trends are favorable for WW International Inc (NASDAQ: WW), and its digital shift is likely to boost margins and capital returns, according to Jefferies.
The WW International Analyst
Stephanie Wissink initiated coverage of WW International with a Buy rating and $32 price target.
The WW International Thesis
The COVID-19 health crisis has unlocked a durable trend of making wellness a priority, which creates better growth prospects for WW International, Wissink said in a Tuesday initiation note. (See her track record here.)
Established brands with modern platforms are well-positioned in today's environment, “given scale, resources to acquire & retain customer relationships, and to develop unique content & connected communities,” the analyst said.
WW International has reinvented itself, creating a new brand with a digital experience known as myWW, she said.
With this, the company has expanded beyond diets, Wissink said. While the company previously addressed an $18-billion weight management market, its shift to overall wellbeing implies a target market of $300 billion, the analyst said.
WW International faces a “multi-year growth trajectory” in subscriptions and revenue per user, she said.
“We are intrigued by WW's position as an accessibly priced, leading digital solution for individuals who seek & will pay for an integrated wellness lifestyle platform.”
WW Price Action
Shares of WW International were up 8.32% at $25.44 at the time of publication Wednesday.